Wednesday, the S&P 500 was UP about 0.7% to 1947(rounded).
VIX fell about 9% to 12.85.
The yield on the 10-year Treasury Note was down slightly to 2.41% at the close; the bond Ghouls remain worried.
STOCKS ABOVE THEIR 200 DAY MOVING AVERAGE
The percent of stocks on the NYSE above their 200-dMA fell
slightly to 52% Tuesday (data is a day late).
61% is the trouble point for this stat. 61% is the mean and I think that
is over the past 3-years. So if the mean
is 61% in a normally rising market, a value of 52% is a worrisome number. If it drops below 50% it will confirm a
correction well underway. Chart at…
http://www.indexindicators.com/charts/nyse-vs-nyse-stocks-above-200d-sma-params-3y-x-x-x/
STOCKS BELOW THE 50-dMA A BUY SIGNAL? (Yahoo Finance)
"Stocks have been taking a beating over the past month—but
one technical indicator suggests they could now be a buy.
'It’s very similar to these oversold pullbacks we’ve had
over the past few years,” said Ari Wald, head of technical analysis at
Oppenheimer & Co. “Oversold conditions are a reason to buy the market.” He
looks to one indicator: The percentage of stocks above their 50-day moving average.
In June, around 90 percent of stocks were above their 50-day moving average.
Now, just 23 percent are, which is the lowest that reading has been since
November 2012. “As a sign of internal exhaustion, we view this as a buy
signal,' Wald wrote in a recent note. [Not everone agrees though.] Gina
Sanchez, founder of Chantico Global, doesn’t believe that stocks are trading at
a discount despite indicators saying they are oversold.“We’re still not
screamingly cheap yet,” said Sanchez, a CNBC contributor. “We’re right at about
fair value now.” She expects that the S&P will keep falling, which “should
take out what are the remaining market participants that are holding on.” Yahoo
finance…
http://finance.yahoo.com/blogs/talking-numbers/the-one-reason-you-need-to-buy-stocks-right-now-215309420.htmlRSI
RSI was neutral at 36 as of Wednesday. Oversold is below 30.
BOUNCE OR CORRECTION OVER?
The Index is bumping up to the presumed upper trend line,
if I assume that the index is now a downtrend.
If it breaks much higher it will confirm that this is not a downtrend,
just another fake-out. Since the AUG-SEP-OCT
is the worst period for the market, it may pay to be cautious. I’ll watch a bit more.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) was up to 51% at the close Wednesday. (A number above 50% for the 10-day average is
generally GOOD news for the market. The
average in a normally rising market is 53%.)
New-highs still outpaced New-lows Wednesday. The spread (new-highs minus new-lows) was +45.
(It was +19 Tuesday) The 10-day moving average of change in the spread was +2.
In other words, over the last 10-days, on average, the spread has INCREASED by 2
each day. Internals switched to Positive on the market.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Wednesday. All Indicators are
now neutral.
Market Internals are positive, but the 5-10-20 Timer remains
negative. If both are positive, that
would be a definite buy signal.
MY INVESTED POSITION
I reduced my investment in stocks to 30% on 1 August because
of the NTSM indicators turned negative at the close on 31 July. 30% invested protects the portfolio. If there
is a 50% crash I would only lose 15% of the portfolio value. At the same time, if the market goes up, I
will make some gains. No system is perfect and the NTSM system has
underperformed a buy and hold strategy in the Fed driven market currently in
place.--INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): HOLD (Earnings announce 31 July)
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
